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Recalls becoming 'background noise' that owners ignore

James R. Healey, USA TODAY
11:52 a.m. EDT June 14, 2014

A Chevrolet HHR vehicle is pulled into a service bay before having a new ignition switch installed during a recall repair at Fitzgerald Auto Mall in Frederick, Maryland.(Photo: Patrick Smith, USA TODAY)

The cavalcade of auto recalls this year quickly could be turning the safety notices into mere background noise ignored by car owners.

"If every recall is publicly covered, it is no longer an unusual event. The public will pay no attention," says George Hoffer, transportation economist at the University of Richmond, who has studied the auto industry for more than 40 years.

General Motors started the avalanche on Feb. 7, when it said it had to fix a fatally flawed ignition switch on some small cars. That was quickly expanded twice and is at 2.6 million cars worldwide. The defect is linked to 13 deaths and 54 accidents.

Hoping to clean house and avoid more government fines for recall foot-dragging, GM has announced 38 recalls this year through Friday, covering 14.4 million U.S. vehicles.

At that rate, this year GM alone will far exceed the past decade's annual auto industry average of 21 million cars and light trucks, according to USA TODAY research.

GM's stepped-up recall pace could continue into midsummer, GM Executive Vice President Mark Reuss has said. And on Friday, GM announced four more recalls, with the largest for 464,712 Chevrolet Camaros. The Camaro ignition key can be bumped out of position, a problem linked to three crashes and four minor injuries.

"The American consumer, since the recession, is getting pretty used to hearing bad news," says Greg Smith, chief creative officer at advertising and marketing company VIA Agency. "With this seemingly never-ending GM recall, perhaps we are all becoming desensitized to one more story of bad news."

Other automakers, meanwhile, are clearing their cupboards of safety-related issues to stay out of the sights of the National Highway Traffic Safety Administration, which is promising tougher oversight to prevent a repeat of GM's 13-year dawdling before the switch recall. The others have announced 47 recalls so far this year, covering 8.54 million U.S. vehicles, according to government records.

That's a lot, even though it seems otherwise, in contrast with GM's overwhelming numbers.

Multiple studies already show that recalls have little or no effect on the value of the recalled cars, nor on sales by that manufacturer. And industry experts now see that same "so-what" attitude spilling into whether owners bother to take their cars in for recall repairs.

"The millions of recalls that have been issued this year made the situation worse, and response rates lower. The typical consumer reaction seems to be, 'My car's running fine. Do I need to bother?' " says Jack Nerad, veteran of the auto industry and executive market analyst for KBB.com. "The fact is, they should bother, but getting them to grasp that is a bit like trying to push a string."

NHTSA says about 75% of recalled vehicles eventually get fixed, depending on the value and age of the vehicle, how serious the problem seems and how likely the owner thinks it is to happen.

The agency believes toning down recall commotion would hurt, not help: "We think safety is best served by increasing and improving ways to reach consumers, not by limiting the number of recalls."

The reaction to GM's switch recall has begun to seem alarmist, according to Nerad, Hoffer and other observers.

"There is a thought that, 'Manufacturers are being overprotective and there's nothing wrong with my car,' " says Jesse Toprak. top industry analyst at Cars.com. He ran auto dealerships in the Midwest 1995-2000, so has seen the issue close up. Car owners are beginning to react with "Here we go again," Toprak believes.

It's too soon, of course, for NHTSA to have statistics on whether the GM recalls have changed the typical owner response rate. Only since April has GM had enough new switches to begin repairing the defective cars.

Anecdotally, though, there seems little question: "NHTSA and manufacturers alike have complained to me about the difficulty in reaching folks with recalled cars and then getting them to respond," Nerad says.

It's easy to see why car companies are quicker to pull the recall trigger on issues they might have studied longer in past years. In addition to staying out of NHTSA's cross hairs, they want to avoid getting summoned before Congress to explain themselves and be hammered, as happened to GM CEO Mary Barra over the switch recall in April.

Nor do they want lawsuits such as those piling up against GM, or a Justice Department criminal investigation such as GM's, or a Securities and Exchange Commission probe like the one on whether GM was truthful with investors.

Or the bills. GM so far has announced $1.6 billion in charges against its earnings the first two quarters to pay for the recalls.

Toprak thinks a rating system might break through the clutter and give owners a better idea of what's urgent. "The life-threatening aspect would be the biggest component. Can it cause a fire? Or do you have a potential brake pedal problem — that's a nine or 10" on a 10-point threat scale, he says.

Something less immediately life-threatening might be a two, signaling that the owner safely could wait a few months to get the problem fixed.

In a roundabout way, recalls can improve overall auto safety beyond the recalled and repaired cars.

Toprak says good dealers can turn recalls into sales of, presumably, new cars with the latest safety features: "You get his influx of customers waiting for their recalls to be done. If you have qualified salespeople you can turn this into a major sales opportunity."